Dairy Crest H1 profits fall amid dairies losses

Dairy Crest today (6 November) reported a drop in half-year profits due in part to losses from its dairies arm - a business it has agreed to sell to German giant Müller.

The UK dairy group booked adjusted pre-tax profits of GBP21.3m (US$34m) for the six months to 30 September, down 3% on the year.

Dairy Crest's dairies business - which includes private-label milk supplies, doorstep delivery and the Frijj brand - generated an operating loss of GBP4.4m, compared to profit of GBP2.6m a year ago. That came despite a 1.5% increase in revenue to GBP466.8m.

Within its dairies business, Dairy Crest said Frijj had enjoyed "strong growth". However, the group said lower cream realisations and a "significant divergence" between cream revenues and farmgate milk prices led to the division's loss.

It did, however, forecast a "stronger second half" for the business, on which it has struck a deal to sell to Müller for GBP80m, pending competition approval.